BOUNTIFUL BASKETS

AMY SUNG

The holiday season is prime time for selling gift baskets at supermarkets.

As customized and specialty baskets gain in popularity, retailers increasingly source standard, already prepared baskets from wholesalers and distributors to keep up with demand and save time and labor during the hectic holiday season.

"The number of baskets sold has gone up in the past year with the introduction of pre-made baskets," said Paul Kneeland, produce director at Wellesley, Mass.-based Roche Bros. Supermarkets. "Before, we were trying to make them as fast as we could. What ended up happening was customers were disappointed because there were empty displays and our produce managers didn't have the time to catch up."

An upscale chain, Roche Bros. sells just over 1,000 baskets per year and started using distributors two years ago to pack baskets during the holidays, Kneeland said. Throughout the rest of the year, however, gift baskets are assembled in-store.

"Many retail chains use their wholesalers for packing fruit baskets because it is very cost-effective, allows for higher volume of sales, and frees up in-store employees at a very busy time of year," said Alfred Fearon, chief executive officer of OIC International, a basket and basket accessories supplier based in Bolivar, Ohio. "It also enables the retailer to concentrate their labor force to make custom, upper-scale baskets at the store level, adding higher end price points to the store's fruit basket offerings."

Quincy, Mass.-based Stop & Shop makes most gift baskets in the stores. However, its sister chain, Giant Food, uses a wholesaler to make its standard gift baskets, while customized orders are assembled in

the stores. Both chains are divisions of Ahold USA.

"We use wholesalers, but not all over the place," said Robert Keane, spokesman for Stop & Shop. "C&S Wholesalers puts together baskets for some New York metro stores during the holiday season, sometimes for Stop & Shop, and our Giant stores use them all the time."

Gift baskets are strong sellers -- Stop & Shop sold 70,000 during the 2004 holiday season. As a category, baskets offer retailers a lot of benefits beyond the obvious ones, according to Keane.

"It gives us a chance to really show off our products to our customers," Keane said. "We take a lot of pride in the baskets we present. Obviously, [there's] an increase in sales. Depending on what the gift basket is, it really can give the customer or the recipient of the gift a good sampling of the products in various departments of our store."

Indeed, OIC International has seen sales surge. Purchases by 85% of OIC International's established wholesalers and retailers have gone up 15% to 20% from 2004. According to Fearon, fruit baskets are the fastest-growing segment of the business because people are eating healthier. Besides fruit, which is the most popular at Roche Bros., chocolate and nut baskets are also top sellers.

As part of a gift basket, fresh ripe fruit never goes out of style. Patrick Walsh, store manager at Caputo's Markets, Addison, Ill., could not single out one particular type of fruit, but noted customers like variety. "It depends on the customers," he said. "We get all different types of requests."

Filling special orders gives Roche Bros. an advantage, Kneeland said.

"The trend has actually gone towards customizing where we let the customers really choose," he said. "More and more people are requesting very specific items and the fact that we can do that is good for us and also good for the customer. We give them the basket and they're really detailed and specific in what they want a lot of the time. A lot of customers like fruit that is in season. Anything that's going to make the baskets special too."

Caputo's also offers the option of custom baskets in addition to the standard baskets that are offered throughout the year. Shoppers can order baskets in various sizes, including some nonperishable baskets and others that include produce with cheeses and salamis, in keeping with the retailer's Italian heritage.

Though it's by no means universal, in some markets demand is growing for baskets containing organic fruit. "We're seeing two things, a bigger demand for organic fruits and bigger demand for upscale," Keane said. "What I mean by that is crackers, fancy cheeses and the like."

Fearon also sees organics as an emerging trend within the category.

"Because consumers are eating healthier today, some of the trends we are seeing is the organic category of produce used in fruit baskets," Fearon said. "Grapes, blueberries and strawberries cutting into the market share of bananas are evidence of this trend."

It wouldn't be surprising at all to see demand grow, in light of the increasing popularity of organic, Kneeland said.

Though the gift basket category can be profitable all year, Christmas is the most popular time for sales at supermarkets. Retailers typically launch staff training around Thanksgiving for the all-important holiday season. Training is absolutely critical, retailers agreed.

"You really have to have the right type of person, not everybody can put a basket together," Walsh said. "It takes a certain type of person who has an eye for design and presentation."

Keane agreed on the importance of training.

"Probably the No. 1 thing, it's not a concern, but it's something you have to be careful of, is training," he said. "Gift baskets are a very upscale item and people expect perfection or near perfection when they get these items and rightfully so. It's incumbent upon us and that's why we exert an effort to make sure that the people making the baskets are well-trained, that they have a flare for actually designing baskets and not just that everything is in there, but that they're presented well."

During the holiday season, gift baskets assume a high-profile place within the supermarket. At Caputo's, they're usually displayed in the produce section, which is at the front of the store, Walsh said. Throughout the year, the retailer puts up signs and charts displaying the variety of available baskets.

Stop & Shop also displays baskets close to the produce section.

"This time of year, we have a big 16x12-foot display near our front registers of the different varieties of gift baskets," Keane said. "We do in-store displays for promotion during the holiday season."

An attractive basket brimming with fresh fruit and other treats makes gift giving easy for shoppers.

"Gift baskets are a good gift idea for the holidays and throughout the year," said Walsh. "Some people don't know what to bring someone and fruit is always something somebody can use."

Something Different

When consumers think of Christmas plants, they inevitably conjure up images of traditional red poinsettias wrapped in scarlet and green foil.

While poinsettias are still the most popular blooming holiday plant, other choices are becoming popular because they are considered more unique and provide longer value in terms of life span, according to one industry expert.

"We are noticing from a trend standpoint that consumers are much more discriminating than before," said Jim Jordan, principal, Franklin Consulting and Training, Northville, Mich. "You really have to provide something that's a little different from your traditional red poinsettia in a small pot. We've found that a lot of the retailers we're consulting with are very interested in bringing in plants you normally don't see other times of the year, like a narcissus or an amaryllis."

According to growers, the amaryllis is expected to be popular for the holidays this year, Jordan said.

Supermarkets are running into the same problems retail florists encountered when poinsettias started showing up in big-box stores, and became almost a commodity.

"In other words, the pricing differential was so high that many consumers would opt for a cash-and-carry special at a Home Depot, Lowe's or Costco," he said. Retailers need to branch away from the mainstream blooming plants that mass marketers are selling in order to move the plants effectively, Jordan said.

"This has prompted grocery stores to bring in more exotic plants. Exotic, not in terms of where they're grown, but plants that aren't mainstream and still provide color and send some sentiment of expression when it's given as a gift," he said. "It has a perceived value of not being a run-of-the-mill plant that you might get somewhere else."

The holiday theme is important in packaging and merchandising. Jordan told SN that retailers need to think about the product as a gift. Presents must be attractively packaged and show value. "The thing that's important is gift purchases always have higher value than most self-purchases in supermarkets," Jordan said. "It's an opportunity for supermarkets to upgrade or sell more gift purchases, particularly if the plant is not only well-merchandised, but attractively priced."

To reduce shrink, retailers need to know when to put them on sale, Jordan said. While other holiday items like the Christmas cactus and narcissus can be sold after Christmas with a few tweaks in merchandising and packaging, poinsettias offer a much shorter opportunity for sales.

"For poinsettias," he said, "it's pretty much over come Dec. 24."